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CHINA-ECONOMY-GROWTH
China economic growth slows to 6.7% in second quarter
BEIJING, July 16, 2018 (BSS/AFP) – Chinese growth slowed slightly in the
second quarter as the world’s number two economy faced a snowballing trade
fight with the United States.
The economy expanded by 6.7 percent in April-June, down from 6.8 percent in
the first quarter and in line with a 6.7 percent rate tipped in an AFP survey
of economists.
Despite the quarterly deceleration, growth was still higher than the annual
target of around 6.5 percent set by the government.
China faced an “extremely complex environment both at home and abroad”,
said Mao Shengyong, a spokesman for the national statistics bureau, noting
growth remained strong.
China is facing a multi-front battle to defend its economy, fighting to cut
its debt mountain while the yuan and local stock markets tumble in the face
of the trade conflict.
“We should also be aware that external uncertainties are increasing and
economic restructuring is in a phase of overcoming difficulties,” Mao said.
The impact of the deepening trade conflict with the United States was yet
to fully kick in, according to analysts, who added however that Beijing’s
battle to rein in pollution and spiralling debt levels had crimped growth.
Both Washington and Beijing slapped new tariffs on $34 billion of each
others’ goods earlier this month.
Washington raised the stakes last week by threatening to impose fresh
tariffs on another $200 billion in Chinese goods, with Beijing vowing it
would retaliate once again.
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CHINA-ECONOMY-GROWTH 2 LAST BEIJING
– Warning signs –
Signs of a further slowdown are mounting.
Investment in fixed assets continued to slump in the first half of the
year, slowing to 6.0 percent, down 1.5 percent from the first quarter and
marking the slowest pace since data collection began in 1999.
Factory activity also slowed in June, dropping from an eight-month high.
Trade data last week provided a bright spot, showing China’s export machine
held up in the face of the mounting tensions — but analysts warned the
numbers may have been inflated by exporters pushing out shipments early to
beat the scheduled tariffs.
The yuan, meanwhile, has been sliding, though a weaker currency might help
exporters facing the US tariffs.
Beijing has indicated it would ease up on its tough fight against debt,
which analysts have blamed for the growth slowdown.
China should continue making progress on that front while “maintaining
stability”, Mao said.
In June, China’s central bank said it would reduce the reserve requirement
ratio for most banks in an effort to free up funding for small firms.
BSS/AFP/HR/0925